Best Pay Profits

“Adding time to investing is like adding fertilizer to a garden:It makes everything grow.”

Veeru and Jay were good college buddies, but after graduating in 1995 both got jobs in different cities and have to part ways. Thanks to Facebook, they met again 15 years later in 2010. While meeting over lunch, they happily discussed their college memories, family, kids and finally their investments. Veeru was shocked to find that Jay has got a portfolio value of Rs. 75 lacs. Well, the interesting part is that Jay never earned more than Rs. 6 lacs per year.

Did that get your attention? You may be asking, “How is that possible? Did Jay win a lottery? Did he rob the bank? Is he a stock market wizard? Did he have a great advisor? Or was he just lucky?”

Well, the truth is that he accumulated this fortune through consistently saving and investing over time. Anyone can do it, although very few choose to do it. The calculation is pretty simple, an investment of Rs. 12,500 done at the beginning of every month in equity mutual funds generating average annual return of 14 percent, grows to a sum of Rs. 76.60 lacs in 15 years. Incidentally, Rs. 12,500 is only 25 percent of Jay’s monthly salary. And in case you are still wondering, the math works the same for everybody, including you.

THE MAGIC IS IN COMPOUNDING

Most people earning Rs. 6 lacs per year believe that the only way to become a crorepati is to win the lottery. However, the power of compounding and the accompanying Rule of 72 illustrate how anyone can slowly transform small savings into large fortunes over time.

When I used the word “network”, many of you might be thinking that I will provide you a list of Investment Banks, Private Equity funds and Finance companies. While the list is important, it’s also important to look at how to approach people and network in Finance.

Networking is building and maintaining relationships.

Whatever you want to learn, be it Finance or networking, there are strategies and tactics.

Strategies are high level views like how to conduct informational interviews, how to approach people in groups and making a career plan.

Tactics are how you say, what you say, emailing etc.

You need both the approaches in networking.

What key strategies you need to apply? How to develop the mindset for networking?

Follow some do’s and don’ts in networking:

Do’s

1.If the school/college you are graduating from is not well-known, put extra efforts in networking.

2. Start networking months and months before you actually look for a job. You can do this simultaneously with your graduation.

3. Networking is about getting more people to know you, so meet as many people as you can in Finance.

4. When you meet people, be genuinely interested in them. Discuss about their background, interest, hobbies, and any recent personal event. Practice this and you will build relationships.

5. Understand that networking is a long term effort.

6. Change the strategy of networking if you are not getting results after investing months. Ask friends and people in Finance what is going wrong.

7. While networking, don’t overlook names/friends in your circle.

8. Keep in mind that only early bird catches the worm. Have an early start and establish contacts.

9. Check whether you are making progress.